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Competitive Alternatives Highlights
KPMG's Guide to International Business Location
Cost trends
Since the previous (2006) edition of Competitive Alternatives,
the most notable cost trends have been caused by the weakening of
the US dollar against all other major currencies. However, changes
in the local cost fundamentals in each country have also impacted
results:
- The United States has experienced
the greatest gain in cost competitiveness since 2006, improving
its position significantly against all other countries as the
value of the US dollar has declined.
- Canada and Australia
have both lost their previous cost advantages relative to the
US, but have both gained ground relative to the European countries.
- France, Germany,
Italy, and the Netherlands
have all lost ground, not only relative to the US, but also to
the United Kingdom, which has
benefited from the stronger appreciation seen by the euro than
the pound.
- While Japan remains a relatively
high-cost country, over the longer term its has gained some ground
against most countries, due to its low inflation rates and the
lower volatility of the yen vis-à-vis the US dollar.
The results of this study are sensitive to exchange rates. Exchange
rates used in this study, along with comparative rates from the
time of the previous (2006) study, are as follows:
| Exchange Rates* |
| Currency |
2006 Edition |
2008 Edition |
% Change** |
| Euro |
€0.84 |
€0.68 |
23.7% |
| UK £ |
£0.57 |
£0.50 |
14.4% |
| Canadian $ |
CA $1.17 |
CA $1.00 |
17.4% |
| Mexican Peso |
MX $10.71 |
MX $10.87 |
-1.5% |
| Australian $ |
AU $1.34 |
AU $1.14 |
17.9% |
| Japanese ¥ |
¥117.26 |
¥111.27 |
5.4% |
| * |
Per US$. |
| ** |
Two-year appreciation relative to US$. |
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